Scottish brands to suffer if Scotland becomes independent

Scottish brands could lose favour with English and Welsh consumers if Scotland becomes independent, with more than a third (36 per cent) of Britons warning they are less likely to deal with companies based north of the border if the country separates from the rest of the UK. 

This should be a concern for brands in Scotland, which could lose custom as a result, according to a poll carried out by ICM for Marketing Week, asking about companies such as Scottish Power, Scottish Widows and Standard Life. 

The debate is hotting up for businesses as the CBI has found. Several Scottish companies have left the organisation in the past few days because of the CBI’s pro-union stance.

Scotland goes to the polls on 18 September to vote on whether it should become an independent nation. If the vote is in favour, first minister Alex Salmond says the country will separate in 2016.

The figures from ICM suggest that both the ‘Yes’ campaign for Scotland to split from the rest of the UK and the ‘Better Together’ movement promoting the UK remains as it is are neck and neck.

Thirty nine per cent of people in Scotland say it should become independent, 43 per cent say it should stay part of the UK and 17 per cent are undecided, which means it could go either way. 

If Scotland splits from England, Wales and Northern Ireland, there will be implications not just for politics but for businesses and brands.

With a significant proportion of people sceptical about whether they would continue their business with brands north of the border, what will be the effect on a company with ‘Scottish’ in its name? 

“Take an organisation like Scottish Widows – one of a plethora of brands with ‘Scottish’ in its name,” says ICM research director Gregor Jackson. “Is there the potential to rebrand from scratch or just drop the reference to Scotland? 

“Some of these brands are old and keeping ‘Scottish’ in their names is perceived to be a strength, but this research suggests that in the event of a Yes vote, consumers in the rest of the UK would be less likely to deal with them.”

Few brands have spoken publicly about any plans if there were a split and Scottish Widows did not have anyone available for comment when contacted by Marketing Week. 

Standard Life announced in February that it may move its head office south of the border to protect its stakeholders’ interests in the event of a separation. Scottish engineering company Weir Group said earlier this month that the benefits of a split would be few and uncertain. 

UKTV marketing director Simon Michaelides says companies should be planning for both scenarios now. “Brands that say they will see what happens are using a dangerous strategy as they are on the back foot and will be disrupted by others that have a first-mover advantage,” he says. “They should be thinking about it now and working out their strategy either way.” 

Brands should take notice of consumers with clout as those on high incomes are most likely to see Scottish companies negatively, finds the research. “ABs are considerably more likely to say they wouldn’t deal with companies based in Scotland than those in the DE group. The figures are 40 per cent versus 26 per cent,” says Jackson. 

Forty-six per cent of British people with a household income of more than £55,000 say they would be less likely to do business with Scottish brands in the event of independence, which could effect companies in all sectors. 

On the plus side, people are generally positive on how Britain is viewed as an overall brand, although it is unclear which countries would come under the ‘British’ banner. Forty-seven per cent identify with ‘Best of Britain’, when asked to think about how retailers use countries to promote their products. 

However, questions remain as to whether Britain could still be used as a name if Scotland were separate. “The figures suggest that brand Britain has longevity and that is important. If Scotland leaves the UK, is there a British brand? The results are saying yes, even without the Scots,” says Jackson.

Those north of the border also identify with ‘Best of British’ as a branding device as well as ‘Best of Scottish’.

Britain has used its strong brand recently following the Queen’s Jubilee and the Olympic Games in 2012, with VisitBritain running a campaign focusing on what is ‘great’ about the country. It is ranked third as an ‘overall nation brand’ after the US and Germany and fourth for tourism, according to the latest Anholt-GfK Nation Brand Index.

One of the most recognisable assets of brand Britain is the union flag and 29 per cent say retailers should no longer use it in their advertising if Scotland leaves the UK. This view is highest among Scottish people, of whom 34 per cent are against brands using the flag compared with 29 per cent in England and 24 per cent in Wales.

This could affect companies such as Virgin Media, which incorporated the flag into its logo in 2011, and British Airways, which uses the flag on its aeroplanes’ tail fins.

But marketers should not rush to redesign their advertising and packaging just yet, says Jackson. 

“A further 45 per cent of people neither agree nor disagree that the flag shouldn’t be used in advertising. There is uncertainty about the continued use of the flag but when you ask people if they would still buy a product or service that had a British flag on it, they say ‘yes’. So there is a difference between what they think and would do.”

UKTV’s Michaelides points out that if Scotland were to separate, the union flag may no longer be relevant. “How would we replace that and the inherent value and equity that has been built in it over decades?”

Brands that Marketing Week contacted, including Marks & Spencer, Virgin Media, Royal Bank of Scotland and British Gas, were unwilling to comment. M&S and RBS were concerned that any comment would be construed as a political statement. But BA says its focus is on customers and a spokesperson adds: “Scottish independence is a matter for the Scottish people and as long as there is demand from customers, we will continue flying to and from Scotland.” 

For brands that make the most of their Scottish heritage, such as Walker’s Shortbread and cashmere company Pringle of Scotland, independence could be a benefit. However, all companies should be considering how consumers’ views of their brands might change in the event of a yes vote.

As Jackson says: “Scottish-based companies have to make contingency plans but companies in the south shouldn’t be complacent and realise it does effect consumers.”